Telecom utility charged with causing billions in losses

Vietnam’s telecommunication utility provider has committed several wrongdoings in equitizing several of its affiliates, causing losses worth billions of dongs to the state budget, inspectors say.

Members of the Government Inspectorate said apart from the equitization process, the wrongdoings also extended to how the Vietnam Post and Telecommunication Group (VNPT) has managed its land holdings and investments. They estimate the total losses to the state budget at more than VND89 billion (US$5 million).

Between 1999 and 2005, the Prime Minister had approved for VNPT to equitize its 42 state-owned affiliates. But the group had only managed to turn 39 of them into joint stock companies by this August, the inspectors found.

The firms yet to be equitized include a cable firm that has not cleared its debts to its partners and a postage stamp printer that is facing police investigation for several irregularities in financial management.

Under government regulations, the equitization must be carried out under rules of the Ministry of Post and Telecommunication, which is now the Ministry of Information and Communication. But 26 of the 39 firms were equitized under the decision of VNPT leaders.

VNPT has also not revoked state budget funds worth nearly VND44 billion from 12 of the equitized firms as well as around VND17.5 billion worth of profit made from this money.

Besides, the group and its members are using around 34.4 hectares of land but as of the end of 2008, 13 had not signed land lease contracts with the city/provincial Departments of Natural Resources and Environment nor paid the land rent.

The inspectors also said that three equitized member firms have used investments worth VND140 billion for several projects but have not reported that to VNPT. Most of the projects were ineffective, they added.

The inspectors have asked the Prime Minister to instruct VNPT to deal with the wrongdoings and return VND89 billion to the state budget. They also asked the PM to have the Ministry of Information and Communications punish individuals responsible for the losses.

Tags: Vietnam business news, Vietnam Telecom